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1976-1493/30 CITY OF ANAHEIM RESOLUTION NO. 76R-149 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM, CALIFORNIA, AUTHORIZING THE ISSUANCE OF $6,000,000 ELECTRIC REVENUE BONDS OF SAID CITY AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID BONDS WHEREAS, the City of Anaheim is a municipal corporation organized and existing under a Charter duly and regularly adopted pursuant to the provisions of the Constitution of the State of California; and WHEREAS, Section 1210 of said Charter provides as follows: "Bonds which are payable only out of such revenues as may be specified in such bonds may be issued when the City Council by ordinance shall have established a procedure for the issuance of such bonds. Such bonds, payable only out of revenues, shall not constitute an indebtedness or general obligation of the City. No such bonds payable out of revenues shall be issued without the assent of a majority of the voters voting upon the proposition for issuing the same at an election at which such proposition shall have been duly submitted to the qualified electors of the City. "It shall be competent for the City to make contracts and covenants for the benefit of the holders of any such bonds payable only from revenues and which shall not constitute a general obligation of the City for the establishment of a fund or funds, for the maintaining of adequate rates or charges, for restrictions upon further indebtedness payable out of the same fund or revenues, for restrictions upon transfer out of such fund, and other appropriate covenants. Money placed in any such special fund for the payment of principal and/or interest on any issue of such bonds or to assure the application thereof to a specific purpose shall not be expended for any other purpose whatever except for the purpose for which such special fund was established and shall be deemed segregated from all other funds of the City and reserved exclusively for the purpose for which such special fund was established until the purpose of its establishment shall have been fully accomplished;" and WHEREAS, Ordinance No. 2980 of the City Council of the City of Anaheim, incorporating certain sections of the Revenue Bond Act of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the Government Code of the State of California), establishes a procedure for the issuance of such bonds as provided for in said Section 1210; and WHEREAS, pursuant to said Section 1210 and said Ordinance No. 2980, the City has heretofore issued $8,000,000 electric revenue bonds designated "Electric Revenue Bonds, Issue of 1972"; and WHEREAS, pursuant to said Section 1210, said Ordinance No. 2980 and Resolution No. 74R-615 of the City Council of the City of Anaheim, a special municipal election was held in said City on March 4, 1975, for the purpose of submitting to the qualified voters of said City the following proposition: "In order to provide more economical electrical service, shall the City of Anaheim be author- ized to finance the construction and acquisition of facilities, property and rights related to the generation, transmission and distribution of electrical energy by issuing revenue bonds, not payable from property taxes, in an amount not to exceed 150 Million Dollars?"; and WHEREAS, said proposition was approved by the votes of more than a majority of all the voters voting on said proposition at said special municipal election; and 3/30 WHEREAS, said City is now authorized to issue said bonds pursuant to the procedures set forth in said Ordinance No. 2980, and as provided in said Section 1210; and WHEREAS, this City Council deems it necessary to issue and sell $6,000,000 principal amount of said bonds at this time, designated "Electric Revenue Bonds, Issue of 1976"; NOW, THEREFORE, the City Council of the City of Anaheim, California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: Section 1. Definitions. As used in this Resolution: (a) "Authorized investments" means any obligations in which the City may lawfully invest its funds, provided that so long as any of the 1972 Bonds are outstanding the term "authorized investments" shall be limited to mean direct obligations of or obligations guaranteed by the United States of America, or Certificates of Deposit of recognized banks or trust companies fully secured by direct obligations of or obligations guaranteed by the United States of America. (b) "Bonds" (capitalized) means the revenue bonds authorized to be issued by this Resolution. (c) "City" means the City of Anaheim, California. (d) "City Council" means the City Council of the City. (e) "Enterprise" means the entire electric system of the City of Anaheim, including all improve- ments and extensions later constructed or acquired ( sometimes hereinafter referred to as "Electric System") . (f) "Fiscal year" means the year period beginning on July 1 and ending on the next following June 30. (g) "Gross revenues" or "Revenues" means rates, fees and charges for providing electric service to persons and real property and all other fees, rents and charges and other income derived by the City, from the ownership, operation, use or services of the enterprise, which Revenues are required to be deposited in the Electric Revenue Fund pursuant to Section 12 hereof. (h) "Maintenance and operation expenses" means the reasonable and necessary current expenses of maintaining, repairing and operating the enterprise, including City administrative expenses directly attributable to electric system functions, but excluding depreciation, interest and amortization, all computed in accordance with sound accounting principles and consistent with existing accounting practices of the City. (i) "Net revenues" of the enterprise means the amount of the gross revenues less the main- tenance and operation expenses as defined. (j) "1972 Bond Resolution" means Resolution No. 72R-83 of the City Council, adopted March 14, 1972, authorizing the issuance of the 1972 Bonds. (k) "1972 Bonds" means the $8,000,000 electric revenue bonds designated "Electric Rev- enue Bonds, Issue of 1972" referred to in the recitals hereof. (1) "Parity bonds" means revenue bonds, revenue notes or other similar evidences of indebtedness (including those referred to in the 1972 Bond Resolution as "Additional Bonds") heretofore or hereafter issued for the acquisition, construction and financing of extensions of, additions to, repairs and replacements to, renewals of, and improvements of the enterprise, payable out of the Revenues and which, as provided in this Resolution, rank on a parity with the Bonds. (m) "Revenue Bond Law" means the Revenue Bond Law of 1941 as cited in the recitals hereof. (n) "Subsequent resolution" means any resolution authorizing the issuance of parity bonds subsequent to the issuance of the Bonds. (o) "Treasurer" means the City Treasurer of the City. W, 3/30 Section 2. Equality of Bonds, Pledge of Revenues. Pursuant to said Section 1210 of the City Charter, said Ordinance No. 2980 and this Resolution, the Bonds shall be equally secured by a pledge, charge and lien upon the gross revenues of the enterprise without priority for number, date of bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of said Bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon the gross revenues of the enterprise, and all of the gross revenues of the enterprise are hereby pledged, charged and assigned for the security of said Bonds, and such gross revenues and any interest earned on the gross revenues shall constitute a trust fund for the security and payment of the interest on and principal of said Bonds and so long as any of the Bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used for any other purpose, except as permitted by this Resolution, the 1972 Bond Resolution, and any subsequent resolution, and shall be held in trust for the benefit of the bondholders and shall be applied pursuant to this Resolution, or to this Resolution as modified pursuant to provisions herein, the 1972 Bond Resolution, and any subsequent resolution. Nothing in this Resolution shall preclude: (a) the redemption prior to maturity of any Bonds subject to call and redemption and payment of said Bonds from proceeds of refunding bonds issued under said Section 1210 as the same now exists or as hereafter amended, or under any other law of the State of California; (b) the issuance, subject to the limitations contained herein, of parity bonds; or (c) the issuance of additional indebtedness payable solely from surplus moneys in the Electric Revenue Fund pursuant to Section 12, hereof. Section 3. Amount, Issuance, Purpose and Nature of Bonds. Under and pursuant to said Section 1210, Bonds in the amount of $6,000,000 shall be issued for the purposes stated in the recitals hereof. Said Bonds shall be special obligations of the City and shall be secured by a pledge of and lien upon, and shall be a charge upon, and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption of any thereof solely from, the gross revenues of the enterprise, such gross revenues being hereby pledged, charged and assigned for the security of the Bonds. Section 4. No General City Liability. The general fund of the City is not liable for the payment of the Bonds or their interest, nor is the credit or taxing power of the City pledged for the payment of the Bonds or their interest. The holders of the Bonds or coupons shall not compel the exercise of the taxing power by the City or the forfeiture of any of its property. The principal of and interest on the Bonds and premiums upon the redemption of any thereof are not a debt of the City nor a legal or equitable pledge, charge, lien, or encumbrance, upon any of its property, or upon any of its income, receipts, or revenues, except the gross revenues of the enterprise. Section 5. Description of Bonds. The Bonds shall be in the principal sum of $6,000,000. The Bonds shall all be in the denomination of $5,000, and shall be 1200 in number, numbered 1 to 1200, inclusive. The Bonds shall be designated ELECT RIC REVENUE BONDS, ISSUE OF 1976, shall be dated May 1, 1976, and shall be payable in consecutive numerical order on May 1 in each year of maturity in the amounts for each of the several years as follows: Principal Principal Year Amount Year Amount 1977 ------------------------------- $ 75,000 1992--- ---------------------------- $150,000 1978----------------- ------------- 75,000 1993--------- ----------- ---------- 150,000 1979------- ------------------------ 100,000 1994----------- -------- - ----------- 175,000 1980-------------------------------- 100,000 1995-------------------------------- 200,000 1981------------ ---- - -------------- 100,000 1996 -------------------------------- 225,000 1982------------------- ----------- 100,000 1997------------ ------------- 250,000 1983------------ --------- - ---- 100,000 1998------------------------------- 275,000 1984--------- ------------------ 100,000 1999------------ ------------- 300,000 1985---------- --------- ----------- 125,000 2000 -------------------- ----------- 325,000 1986-------------------- ----------- 125,000 2001-------------------------------- 350,000 1987----------- -------------------- 125,000 2002-------------------------------- 350,000 1988------- ------------------------ 125,000 2003--------------- ------------ 375,000 1989--------------- ------- -------- 125,000 2004 -------------------------------- 400,000 1990 ---------------------------- --- 150,000 2005------------------- ---- - ------ 400,000 1991--- ---------------------------- 150,000 2006------- ----------------------- 400,000 3/30 Section 6. Interest. Said Bonds shall bear interest at a rate or rates to be hereafter fixed by resolution, but not to exceed eight percent (8% ) per annum, payable semiannually on the first days of May and November of each year. Each Bond shall bear interest until the principal sum thereof has been paid, provided, however, that if at the maturity date of any Bond, or if the same is redeemable and has been duly called for redemption, funds are available for the payment or redemption thereof in full accordance with the terms of this Resolution, said Bonds shall then cease to bear interest. Said Bonds and the interest thereon shall be payable in lawful money of the United States of America at the office of the Treasurer in Anaheim, California, or, at the option of the holder, at any paying agent of the City in Los Angeles or San Francisco, California, Chicago, Illinois, or New York, New York. Section 7. Execution of Bonds. The Mayor of the City and the Treasurer are hereby authorized and directed to sign the Bonds by their printed, lithographed or engraved facsimile signatures, and the City Clerk of the City is hereby authorized and directed to countersign the Bonds and to affix thereto the corporate seal of the City, and the Treasurer is hereby authorized and directed to sign the interest coupons of the Bonds by his printed, lithographed or engraved facsimile signature. Section 8. Registration. The Bonds may be registered either as to principal only or as to both principal and interest, and any registered Bond may be discharged from registration in the manner and with the effect set forth in the provisions for registration contained in the form of bond set forth herein. Section 9. Redemption of Bonds. The Bonds maturing on or prior to May 1, 1986, are not subject to call or redemption prior to maturity. The Bonds maturing on or after May 1, 1987, may be called before maturity and redeemed, at the option of the City, on May 1, 1984, or on any interest payment date thereafter prior to maturity, at a redemption price for each redeemable Bond equal to 1001/4% of the principal amount thereof plus 1/4% of such principal amount for each whole twelve months' period and for any remaining fraction of a twelve months' period from the redemption date to the maturity date of such Bond, but the redemption price, including premium payable at any time upon redemption, shall not exceed 104% of such principal amount. All or any of the Bonds subject to call may be called for redemption at any one time. If less than all of the Bonds are redeemed at any one time, such Bonds shall be redeemed by complete maturity or maturities. The interest payment date on which Bonds which are called are to be presented for redemption is herein sometimes called "redemption date." (a) Notice of Redemption. Notice of the intended redemption shall be published by one insertion in a newspaper of general circulation in the County of Los Angeles, California, and in a financial newspaper or journal of national circulation published in the City of New York, New York, said publications to be at least 30 days but not more than 60 days prior to the redemption date. The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the numbers and date of maturity of the Bonds to be redeemed, provided, that whenever any call includes all of the outstanding Bonds subject to call the numbers of the Bonds need not be stated; (d) require that such Bonds be surrendered with all interest coupons maturing subsequent to the redemption date ( except that no coupons need be surrendered on Bonds registered as to both principal and interest) at the office of the Treasurer in Anaheim, California, or, at the option of the holder, at any paying agent of the City in Los Angeles or San Francisco, California, Chicago, Illinois, or New York, New York; and (e) give notice that further interest on such Bonds will not accrue after the designated redemption date. The Treasurer shall, on or before the date of publication of said notice of redemption, mail a similar notice postage prepaid to any person, firm or corporation that originally purchased any of said Bonds from the City. If any of the Bonds designated for redemption shall be registered so as to be payable otherwise than to bearer, the Treasurer shall, on or before the date of publication of said notice of redemption, 4 3/30 mail a similar notice postage prepaid to the respective registered owners thereof at the addresses appearing on the bond registry book. The actual receipt by the holder of any Bond of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the redemption date. The notice or notices required by this section shall be given by the Treasurer. A certificate by the Treasurer that notice of call and redemption has been given to original purchasers and to holders of registered Bonds as herein provided shall be conclusive as against all parties, and no bondholder whose Bond or registered Bond is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to receive actual notice of call and redemption. (b) Redemption Fund. Prior to the redemption date there shall be established a redemption fund to be described or known as Electric Revenue Bonds, Issue of 1976, Redemption Fund (herein sometimes referred to as "Redemption Fund"), and prior to the redemption date there shall be set aside in said Redemption Fund moneys available for the purpose and sufficient to redeem, at the premiums payable as in this Resolution provided, the Bonds designated in such notice of redemption. Said moneys must be set aside in said fund solely for that purpose and shall be applied on or after the redemption date to payment (principal and premium) of the Bonds to be redeemed upon presentation and surrender of such bonds and, except as to registered Bonds, all interest coupons maturing after the redemption date, and shall be used only for that purpose. Any interest coupon due on or prior to the redemption date shall be paid from the Bond Service Account upon presentation and surrender thereof. Any interest due on or prior to the redemption date upon Bonds registered as to both principal and interest shall be paid from said Bond Service Account. Each Bond presented, if unregistered, or if registered as to principal only, must have attached thereto or presented therewith all interest coupons maturing after the redemption date. If, after all of the Bonds have been redeemed and cancelled or paid and cancelled, there are moneys remaining in said Redemption Fund, said moneys shall be transferred to the Electric Revenue Fund; provided, that if said moneys are part of the proceeds of refunding bonds said moneys shall be transferred to the fund or account created for the payment of principal of and interest on such refunding Bonds. (c) Eflect of the Notice of Redemption. When notice of redemption has been given, and when the amount necessary for the redemption of the Bonds called for redemption (principal and premium) is set aside for that purpose in the Redemption Fund, the Bonds designated for redemption shall become due and payable on the redemption date, and upon presentation and surrender of said Bonds and, except as to Bonds registered as to both principal and interest, all interest coupons maturing after the redemption date, at the place specified in the notice of redemption, such Bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and no interest will accrue on such Bonds called for redemption or on any interest coupon thereof after the redemption date specified in such notice, and the holders of said Bonds so called for redemption after such redemption date shall look for the payment of such Bonds and the premium thereon only to said Redemption Fund. All Bonds redeemed and all interest coupons thereof shall be cancelled forthwith and shall not be reissued. All interest coupons pertaining to any redeemed Bonds, which coupons have matured on or prior to the redemption date, shall continue to be payable to the respective holders thereof but without interest thereon. All unpaid interest payable at or prior to the redemption date upon Bonds registered in such manner that the interest is payable only to the registered owners shall continue to be payable to the respective registered owners of such Bonds, or their order, but without interest thereon. Section 10. Funds and Accounts. Under and pursuant to said Section 1210, said Ordinance No. 2980, and the 1972 Bond Resolution, the following funds and accounts were created: E7 3/30 (1) Electric Revenue Bonds, Issue of 1972, Electric Revenue Fund held by the City Treasurer,. in which were created the following accounts: (a) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Account; (b) Electric Revenue Bonds, Issue of 1972, Electric System Maintenance and Operation Account (the "M & O Account"); (c) Electric Revenue Bonds, Issue of 1972, Electric System Renewal and Replacement Account (the "R and R Account"); (d) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond Construction Account; (2) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond and Interest Fund (the "Bond Service Fund") held by the Fiscal Agent under the 1972 Bond Resolution; and (3) Electric Revenue Bonds, Issue of 1972, Electric System Revenue Bond Reserve Fund (the "Reserve Fund") held by said Fiscal Agent. The Electric Revenue Bonds, Issue of 1972, Electric Revenue Fund shall continue to be maintained by the Treasurer, but shall be redesignated the "Electric Revenue Fund." The account described in (a) above is found to be unnecessary and shall be discontinued. All references in the 1972 Bond Resolution to the "revenue account" shall hereafter be deemed to mean the Electric Revenue Fund. The Treasurer shall continue to maintain the separate accounts described in (b) and (c) above, but each such account will be redesignated by deleting the words "Electric Revenue Bonds, Issue of 1972", and shall continue to maintain the account described in (d) above so long as any of the 1972 Bonds remain outstanding. The funds described in (2) and (3) above shall continue to be maintained by the Fiscal Agent under the 1972 Bond Resolution so long as any of the 1972 Bonds remain outstanding. There are hereby created the following additional accounts within the Electric Revenue Fund: (a) Electric Revenue Bonds, Election 1975, Construction Account (the "Construction Account") ; and (b) Electric Revenue Bonds, Bond Service Account (the "Bond Service Account"). Section 11. Disposition of Bond Proceeds. The proceeds of the sale of the Bonds shall be received by the Treasurer and deposited as follows: (1) The accrued interest, and premium, if any, in the Bond Service Account. (2) The balance in the Construction Account. The City may deposit money received from any source in the Construction Account. The moneys set aside and placed in the Construction Account shall remain therein until from time to time expended for the purposes for which the Bonds were issued. Moneys in the Construction Account may be invested in any authorized investments, provided that the maturity or maturities thereof shall not be later than the date or dates on which moneys must be available to meet scheduled Construction Account expenditures. If any sum remains in said Construction Account after the full accomplishment of the purposes for which the Bonds were issued, it shall be transferred to and placed in the Electric Revenue Fund. Section 12. Electric Revenue Fund. The Treasurer shall deposit the gross revenues of the enterprise as received in the Electric Revenue Fund. The Treasurer shall allocate or transfer moneys from the Electric Revenue Fund in the amounts and priority as follows. 3/30 Section 13. Bond Service Account. First, on or before the twentieth day of each calendar month so long as any of the Bonds are outstanding, in addition to the transfer required by Section 14 of the 1972 Resolution, the Treasurer shall allocate to the Bond Service Account the following amounts: (1) One -Sixth of the interest which will become due and payable on the outstanding Bonds within the next ensuing six months, except that for the first interest payment due after the issuance of the bonds the monthly sum allocated shall be the interest which will become due and payable less the amount of any accrued interest placed in the Bond Service Account divided by the number of months remaining in said period; and (2) one -twelfth of the principal amount which will mature and be payable on the out- standing Bonds within the next ensuing twelve months, except that for the first principal payment due after the issuance of the Bonds the monthly sum allocated shall be the principal amount which will be due and payable divided by the number of months remaining in said period. In the event that the allocations for each calendar month as aforesaid are less than the amounts required for that month because of lack of funds or for any other reason the deficiency shall be added to and become a part of the allocations required for the following calendar month. In any event, such sums shall be allocated so that the full amount required to pay, as it becomes due, the interest on said Bonds and any installment of principal on said bonds shall be set aside in the Bond Service Account at least five days prior to the date the installment of interest or principal becomes due. Any moneys required to be set aside in the Bond Service Account may be prepaid in whole or in part by being earlier set aside therein, and in that event the monthly allocation which has been so prepaid need not be made at the time appointed therefor. In any event at least five days prior to the due date of any installment of interest or principal on such Bonds all sums required for the payment thereof must be in the Bond Service Account. Moneys in the Bond Service Account may be temporarily invested in any authorized investments provided that the maturity or maturities thereof shall not be later than the date or dates on which money must be available in the Bond Service Account. The Bonds and the interest coupons shall recite that they are payable from the Electric Revenue Fund, but notwithstanding such recital shall be paid from the Bond Service Account, or from a Redemption Fund established in accordance with Section 9(b) of this Resolution. If after all of the Bonds and any parity bonds have been redeemed and cancelled or paid and cancelled (or provision is made therefor) there are moneys remaining in the Bond Service Account or Reserve Fund said moneys shall be transferred to the Electric Revenue Fund. Section 14. M & O Account. Second, the Treasurer shall allocate to the M & O Account amounts sufficient for the payment of the maintenance and operation expenses of the electric system as said expenses become due and payable. Section 15. Reserve Fund. Third, on or before the twentieth day of each calendar month, but only so long as any of the 1972 Bonds are outstanding, the Treasurer shall make the transfer to the Reserve Fund required by Section 16 of the 1972 Bond Resolution. Moneys in the Reserve Fund shall be held, used and invested in accordance with the 1972 Bond Resolution, including the payment of principal and interest on the 1972 Bonds, the Bonds and any additional parity bonds that may hereafter be issued, in the event that moneys in the Bond Service Fund (in the case of the 1972 Bonds) or the Bond Service Account (in the case of the Bonds and any additional parity bonds) are insufficient therefor. For that purpose, Section 16 of the 1972 Bond Resolution shall be construed to require the Fiscal Agent to withdraw and transfer sufficient moneys from the Reserve Fund to the Bond Service Fund or to the Treasurer for deposit in the Bond Service Account, as the case may be. Section 16. R and R Account. Fourth, on or before the twentieth day of each calendar month as long as the Bonds are outstanding the Treasurer shall allocate to the R and R Account an amount equal 7 3/30 to 1% of the revenues received in the preceding calendar month until a balance is established, or reestablished therein equal to 2% of the depreciated book value of the land, general plant and equipment which constitute a portion of the enterprise. The moneys contained in said account shall be used for transfer to the Bond Service Account or to the Bond Service Fund held by the Fiscal Agent under the 1972 Bond Resolution, as the case may be, to prevent default in payment of the principal and interest on the Bonds or any parity bonds, or for extraordinary maintenance and repairs, renewals and replacements to the system, but not for additions to and extensions of the system, provided, however, that when moneys are used for such purpose or purposes, they shall be returned by the transfer of an additional 1% of the revenues of the preceding calendar month commencing no later than 90 days after such use. If at any time the balance in the R and R Account exceeds the balance herein identified, said excess may be transferred to the Electric Revenue Fund. Section 17. Surplus. All moneys remaining in the Electric Revenue Fund after all transfers required hereunder have been made, and all covenants contained herein have been duly performed may be: ( 1 ) invested in any authorized investments; (2) transferred to the Redemption Fund to be used for the redemption of any of said Bonds which are subject to call and redemption prior to maturity or for the purchase from time to time in the open market of any outstanding Bonds whether or not subject to call and redemption (irrespective of the maturity or number of such Bonds) at prices and in such manner, either at public or private sale, or otherwise, as the City in its discretion may determine, but such purchase price (including brokerage and other charges, but excluding accrued interest) shall not exceed 104% of the principal amount or the redemption price of the callable Bonds on the next redemption date, whichever is less; or (3) used for any lawful purpose of the City, including but not limited to the security and payment of other indebtedness incurred in connection with the enterprise. Section 18. Investments. Except as hereinbefore provided, obligations purchased as investments of moneys in any of the funds and accounts in which investments are authorized shall be deemed at all times to be a part of such funds and accounts and any income realized from such investments shall be credited to such funds and accounts and any losses resulting from such investments shall be charged to such funds and accounts. The Treasurer shall sell at the best price obtainable or present for redemption any obligations so purchased whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer from such funds and accounts. For the purpose of determining at any given time the balance in any such funds and accounts any such investments constituting a part of such funds and accounts shall be valued at the then estimated or appraised market value of such investments. Moneys in all funds and accounts described in Section 10 hereof shall be invested only in authorized investments. Section 19. Warranty. The City shall preserve and protect the security of the Bonds and the rights of the bondholders and warrant and defend their rights against all claims and demands of all persons. Section 20. Covenants. So long as any of the Bonds are outstanding and unpaid, the City makes the following covenants with the bondholders under the provisions of Section 1210 of the City Charter (to be performed by the City or its proper officers, agents or employees) which covenants are necessary, convenient and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the City to expend any moneys other than the revenues of the enterprise. Covenant 1. Punctual Payment. The City covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium thereon, if any be payable, on the date, at the place and in the manner mentioned in the Bonds and coupons and in accordance with this Resolution, and that the payments into the Bond Service Account will be made, all in strict conformity with the terms of said Bonds and of this Resolution, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and all resolutions supplemental thereto and of the Bonds issued hereunder, and that time of such payment and performance is of the essence of the City's contract with the bondholders. L vs* 3/30 Covenant 2. Discharge Claims. The City covenants that in order to fully preserve and protect the priority and security of the Bonds the City shall pay from the Electric Revenue Fund and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the enterprise which, if unpaid, may become a lien or charge upon the property or revenues of the enterprise prior or superior to the lien of the Bonds and impair the security of the Bonds. The City shall also pay from the Electric Revenue Fund all taxes and assessments or other governmental charges lawfully levied or assessed upon or in respect of the enterprise or upon any part thereof or upon any of the revenues thereof. Covenant 3. Commence Acquisition and Construction. The City covenants that as soon as funds are available therefor, the City will commence the accomplishment of the purposes for which the Bonds are issued and will continue the same to completion with all practicable dispatch and in an economical manner. Covenant 4. Operate Enterprise in Efficient and Economical Manner. The City covenants and agrees to operate the enterprise in an efficient and economical manner and to operate, maintain and preserve the enterprise in good repair and working order. Covenant 5. Against Sale, Eminent Domain, Existing and Future Agreements, Competition. Except as provided herein, the City covenants that the enterprise shall not be mortgaged or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed of as a whole or substantially as a whole unless such sale or other disposition be so arranged as to provide for sums adequate to provide for the immediate payment of the principal of and interest on and premiums, if any, due upon the call and redemption thereof, of the Bonds, payment of which is required to be made out of the gross revenues of the enterprise. The City further covenants that the revenues from the enterprise or any other funds pledged or otherwise made available to secure payment of the principal of and interest on the Bonds shall not be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed of or used except as authorized by the terms of this Resolution. The City further covenants that it will not enter into any agreement which impairs the operation of the enterprise or any part of it necessary to secure adequate revenues to pay the principal and interest of the Bonds or which otherwise would impair the rights of the bondholders with respect to the revenues of the enterprise. If any substantial part of the enterprise is sold the payment therefor shall either be used for the acquisition and/or construction of improvements and extensions of the enterprise or shall be placed in the appropriate funds or accounts and shall be used to pay or call and redeem said Bonds and any parity bonds in the manner provided in this Resolution and any subsequent resolution. The City covenants that any amounts received as awards as a result of the taking of all or any part of the enterprise by the lawful exercise of eminent domain, if and to the extent that such right can be exercised against such property of the City, shall either be used for the acquisition and/or construction of improvements and extension of the enterprise or shall be placed in the appropriate funds or accounts and shall be used to pay or call and redeem said Bonds and any parity bonds in the manner provided in this Resolution and any subsequent resolution. The City will not sell, lease or otherwise encumber any part of the Electric System except properties or facilities no longer useful or necessary to its efficient and economical operation, and it will not con- struct, acquire, operate, permit or (to the extent permitted by law) consent to any competing facilities, except the facilities to be acquired from the proceeds of the Bonds, within the City limits. Any proceeds from the sale or disposition of any part of the Electric System shall be placed in the Electric Revenue Fund. Covenant 6. Insurance. The City covenants that it shall at all times maintain with responsible insurers all such insurance on the enterprise as is customarily maintained by similar utilities systems with respect to works and properties of like character against accident to, loss of or damage to such works or properties and loss of revenues insurance. if any useful part of the enterprise shall be damaged or destroyed, such part shall be restored to use. The money collected from insurance against accident, 3/30 loss or damage shall be used for repairing or rebuilding the lost, damaged or destroyed works and properties, and to the extent not so applied, shall be applied to the retirement of said outstanding and unredeemed Bonds and any parity bonds issued for the enterprise and for such purpose paid into the appropriate funds or accounts. The money collected from loss of revenues insurance shall be deposited in the Electric Revenue Fund. The City shall also maintain with responsible insurers workmen's compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the City and the bondholders. Notwithstanding the foregoing, the City may provide any insurance required by this Covenant 6 through a self insurance program. Covenant 7. Records and Accounts. The City covenants that it shall keep proper books of record and accounts of the enterprise, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the enterprise. Said books shall at all times be subject to the inspection of the holders of not less than 10% of the outstanding Bonds or their representatives authorized in writing. The City covenants that it will cause the books and accounts of the enterprise to be audited annually by an independent certified public accountant or firm of certified public accountants and shall furnish a copy of the audit report, upon request, to any bondholder. Covenant 8. Collection of Charges. The City will permit no free use or services of the Electric System. The City will pay promptly into the Electric Revenue Fund from the City's General Fund (or other available funds) for all City use and services of the Electric System. The City will not grant or establish within any class of service preferential or discriminatory rates, fees or charges for use and services of the Electric System. For the purposes of setting such rates, fees and charges, service located outside the city limits of the City of Anaheim may be considered as separate classes of service. The City covenants that it shall at all times during the period any of the Bonds are outstanding maintain and enforce valid regulations for the payment of bills for electric service and that such regulations shall at all times during such period provide that the City shall discontinue electric service to any user whose electric bill has not been paid within the time fixed by said regulations. Covenant 9. Rates and Charges. The City shall and hereby covenants that it shall prescribe, revise and collect such charges for the services and facilities of the enterprise which, after making allowances for contingencies and error in the estimates, shall be at least sufficient to pay the following amounts in the order set forth: (a) The interest on and principal payments of the outstanding Bonds and parity bonds as they become due and payable; (b) All current expenses for the necessary and reasonable maintenance and operation expenses of the enterprise as said expenses become due and payable; (c) All payments required for compliance with this Resolution including transfers required to be made from the Electric Revenue Fund to other funds and accounts; (d) All payments required to meet any other obligations of the City which are charges, liens, encumbrances upon or payable from the revenues of the enterprise; and the charges shall be so fixed that the net revenues shall at least equal 1.10 times the amounts payable under (a), provided that so long as any of the 1972 Bonds remain outstanding said charges shall be so fixed that the net revenues shall at least equal 1.25 times the amounts payable under (a). Covenant 10. No Priority for Additional Indebtedness. The City covenants that no additional indebtedness shall be incurred pursuant to said Section 1210 or any law of the State of California having any priority in payment of principal or interest out of the revenue of the enterprise over the Bonds. 3/30 Covenant 11. Limits on Parity Bonds. Parity bonds may be issued to finance or re -finance any repairs, improvements, enlargements or extensions of the enterprise and to refund any Bonds or parity bonds then outstanding, provided that the City covenants that, except for bonds issued to refund Bonds or parity bonds, no additional indebtedness evidenced by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the revenues of the enterprise and ranking on a parity with the Bonds shall be created or incurred unless: First: The City is not in default under the terms of this Resolution. Second: The net revenues of the enterprise, calculated on sound accounting principles, as shown_ by the books of the City for each of the last two completed fiscal years prior to the adoption of the resolution of award of bids for such additional indebtedness as shown by an audit certificate or opinion of an independent certified public accountant or firm of certified public accountants employed by the City, plus, at the option of the City, any or all of the items hereinafter in this covenant designated (a), shall have amounted tout least 1.10 times the amount of principal and interest which will become due and payable in the fiscal year next succeeding the fiscal year in which such additional indebtedness is incurred on all Bonds and parity bonds, and, so long as any of the 1972 Bonds remain outstanding, at least 1.25 times the maximum annual debt service (as defined in the 1972 Bond Resolution) in any fiscal year thereafter on all indebtedness to be outstanding immediately subsequent to the incurring of such additional indebtedness. For said purposes, principal requirements shall be construed to include mandatory annual sinking fund installments for any series of parity bonds issued or to be issued as term bonds. For the purposes of this covenant, the gross revenues of the enterprise shall not include any sum transferred from the Construction Account under the provisions of this Resolution. The items any or all of which may be added to such gross revenues for the purpose of applying the restriction contained in this covenant are the following: (a) An allowance for earnings arising from any increase in the charges made for service from the enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of said last two completed fiscal years, was not in effect, in an amount equal to 95% of the amount by which the gross revenues would have been increased if such increase in charges had been in effect during the whole of said last two completed fiscal years, as shown by the certificate or opinion of independent certified public accountant or firm of certified public accountants employed by the City. Section 21. Lost, Stolen, Destroyed or Mutilated Bonds. In the event that any Bond or any interest coupon pertaining thereto is lost, stolen, destroyed or mutilated, the City will cause to be issued a new Bond or coupon similar to the original to replace the same in such manner and upon such reasonable terms and conditions, including the payment of costs and the posting of a surety bond if the City deems such surety bond necessary, as may from time to time be determined and prescribed by resolution. The City may authorize such new Bond or coupon or coupons to be signed and authenticated in such manner as it determines in said resolution. Section 22. Cancellation of Bonds. All Bonds and coupons surrendered to the Treasurer or any paying agent of the City for payment upon maturity or for redemption shall upon payment therefor be cancelled immediately. Any Bonds purchased by the City as authorized herein together with all unpaid coupons pertaining thereto shall be cancelled forthwith and shall not be reissued. Section 23. Consent of Bondholders. The consents of bondholders provided for in this section shall relate solely to the amendment, waiver or modification of the covenants specified in Section 20 hereof and shall not be effective to waive or modify any other provisions of this Resolution or any other proceedings for the issuance of the Bonds. Any act relating to the amendment, waiver or modification 3/30 of any of the said covenants consented to by bondholders holding 60% in aggregate principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the City, shall be binding upon the holders of all of the Bonds and interest coupons, whether such coupons be attached to Bonds or detached therefrom, and shall not be deemed an infringement of any of the provisions of this Resolution, whatever the character of such act may be, and may be done and performed as fully and freely as if expressly permitted by the terms of this Resolution, and after such consent relating to such specified matters has been given, no bondholder or holder of any interest coupon, whether attached to a Bond or detached therefrom, shall have any right or interest to object to such action or in any manner to question the propriety thereof or to enjoin or restrain the 'City or any officer thereof from taking any action pursuant thereto. Bondholders may consent by affirmative vote at a bondholders' meeting or may consent in writing without a meeting, all as hereinafter provided. No such amendment, waiver or modification shall be made which will permit (a) a change in the maturity or term of redemption of the principal of any Bond or any installment of interest thereon; (b) a reduction in the principal amount of or redemption price or redemption premium or rate of interest upon any Bond without the consent of the holder of such Bond; or (c) a reduction of the percentage of the principal amount of Bonds the vote or consent of which is required to effect any such amendment. (a) Calling Bondholders' Meeting. If the City shall desire to obtain any such consent it may call a meeting of bondholders, by resolution, for the purpose of considering the action, the consent to which is desired. (b) Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York, not less than sixty days and not more than ninety days prior to the date fixed for the meeting. Such notice shall set forth the nature of the proposed action, consent to which is desired. If any of the Bonds shall be so registered as to be payable otherwise than to bearer, the City Clerk of the City shall, on or before the first publication of such notice, mail a similar notice, postage prepaid, to the respective registered owners thereof at their addresses appearing on the bond registry books. The place, date and hour of holding such meeting and the date or dates of publishing and mailing such notice shall be determined by the City, in its discretion. The actual receipt by any bondholder of notice of any such meeting shall not be a condition precedent to the holding of such meeting, and failure to receive such notice shall not affect the validity of the proceedings thereat. A certificate by said City Clerk, approved by resolution of the City Council that the meeting has been called and that notice thereof has been given as herein provided shall be conclusive as against all parties and it shall not be open to any bondholder to show that he failed to receive notice of such meeting. (c) Voting Qualifications. Any bondholder may, prior to any such meeting, deliver his Bond or Bonds to any agency designated by the City for the purpose, and shall thereupon be entitled to receive an appropriate receipt for the Bond or Bonds so deposited, calling for the redelivery of such Bond or Bonds at any time after the meeting. The Treasurer shall prepare and deliver to the chairman of the meeting a list of the names and addresses of the registered owners of Bonds, with a statement of the maturities and serial numbers of the Bonds held and deposited by each of such bondholders, and no bondholder shall be entitled to vote at such meeting unless his name appears upon such list or unless he shall present his Bond or Bonds at the meeting or a certificate of deposit thereof, satisfactory to the City, executed by a bank or trust company. No bondholder shall be permitted to vote with respect to a larger aggregate principal amount of Bonds than is set against his name on such list, unless he shall produce the Bonds upon which he desires to vote, or a certificate of deposit thereof as above provided. 12 3/30 (d) Issuer -owned Bonds. The City covenants that it will present at the meeting a certificate, signed and verified by one member of the City Council and by the Treasurer stating the maturities and serial numbers of all Bonds owned by, or held for account of, the City, directly or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any Bond appearing upon such certificate, or any Bond which it shall be established at or prior to the meeting is owned by the City, directly or indirectly, and no such bond (in this Resolution referred to as "issuer -owned bond") shall be counted in determining whether a quorum is present at the meeting. (e) Quorum and Procedure. A representation of at least 60% in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) shall be necessary to constitute a quorum at any meeting of bondholders, but less than a quorum may adjourn the meeting from time to time, and the meeting may be held as so adjourned without further notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The City shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meeting shall be organized by the election of a permanent chairman and a secretary. At any meeting each bondholder shall be entitled to one vote for every $5,000 principal amount of Bonds with respect to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy duly appointed by an instrument in writing presented at the meeting. The City, by its duly authorized representative, may attend any meeting of the bondholders, but shall not be required to do so. (f) Vote Required. At any such meeting held as aforesaid there shall be submitted for the consideration and action of the bondholders a statement of proposed action, consent to which is desired, and if such. action shall be consented to and approved by bondholders holding at least 60% in aggregate amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) the chairman and secretary of the meeting shall so certify in writing to the 'City, and such certificate shall constitute complete evidence of consent of bondholders under the provisions of this Resolution. A certificate signed and verified by the chairman and the secretary of any such meeting shall be conclusive evidence and the only competent evidence of matters stated in such certificate relating to proceedings taken at such meeting. (g) Written Consent of Bondholders. If the City shall desire to obtain any such consent in writing, without a meeting of bondholders, the City Council may, by resolution, propose the action, to which consent is desired. A copy of such resolution, together with a request to bondholders for their consent to the action proposed therein, shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York. If any of the Bonds shall be so registered as to be payable otherwise than to bearer, the City Clerk of the City shall, on or before the publication of such resolution and request, mail a copy thereof to each registered owner at the address appearing on the bond registry books. The actual receipt by any bondholder of such resolution and request shall not affect the validity of the proceedings for the obtaining of such consent. A certificate by said City Clerk, approved by resolution of the City Council, that said resolution and request has been published and mailed as herein provided shall be conclusive as against all parties, and it shall not be open to any bondholder to show that he failed to receive such resolution and consent. Each written consent shall be accompanied by proof of ownership of the Bonds for which such consent is given. Proof of ownership shall be made in such manner as shall be prescribed by the resolution proposing the action. Any such written consent shall be binding upon the holder of the Bonds giving such consent and on any subsequent holder (whether or not such subsequent holder has notice thereof) unless such consent is revoked in writing by the holder giving such consent or by the subsequent holder. To be effective, any revocation of consent must be filed before the adoption of the resolution accepting consents as hereinafter provided. 13 3/30 After the holders of at least 60% in aggregate principal amount of the Bonds then outstanding (exclusive of issuer -owned Bonds) shall have consented in writing, the City Council shall adopt a resolution accepting such consents and such resolution shall constitute complete evidence of the consent of bondholders under this resolution. (h) Publication of Consent. Notice specifying the amendment, waiver or modification that has received the consent of bondholders as required by this section shall be published once in a financial newspaper or journal of national circulation published in the City of New York, New York, not less than sixty days following the final action in the proceedings for the obtaining of such consent. Said notice is only for the information of bondholders and failure to publish such notice or any defect therein shall not affect the validity of the proceedings theretofore taken in the obtaining of such consent. Section 24. Band and Coupon Forms. The Bonds shall be payable to bearer, shall be issued in negotiable form, and shall be negotiable, and the form of said Bonds and interest coupons thereof shall be substantially as follows: UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF ANAHEIM ELECTRIC REVENUE BOND, ISSUE OF 1976 No------------------------ -------- $5,000 The CITY OF ANAHEIM, a municipal corporation situated in the County of Orange, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from the Electric Revenue Fund, as hereinafter provided, to the bearer, on May 1, ------_.., upon presentation and surrender of this bond, the sum of FIVE THOUSAND DOLLARS, with interest thereon at the rate of ......% per annum, payable semiannually on the first days of May and November of each and every year from the date hereof until this bond is paid, upon presentation and surrender of the respective interest coupons hereto attached; provided, however, that if at the maturity date of this bond or, if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption, funds are available for the payment or redemption thereof, as provided in the resolution hereinafter mentioned, this bond shall then cease to bear interest. Both principal and interest are payable in lawful money of the United States of America, at the office of the Treasurer of the City of Anaheim in Anaheim, California, or, at the option of the holder, at any paying agent of the City in Los Angeles or San Francisco, California, Chicago, Illinois, or New York, New York. This is one of a duly authorized issue of bonds of the City designated "Electric Revenue Bonds, Issue of 1976," hereinafter called the "bonds," all of which have been issued pursuant to Section 1210 of the City Charter of the City of Anaheim and Ordinance No. 2980 of the City Council of said City, for the purpose of the acquisition, construction and financing of electrical generation, transmission and distribution facilities, and the acquisition of electrical capacity, fuel supply and other property and rights related to the generation, transmission and distribution of electrical energy, and the creation of said issue and the terms and conditions of the bonds are provided for by the resolution of the City Council of said City authorizing the bonds adopted _Marc_h---3Q-,__-1.97.6..... designated Resolution No. _:70R-149 and this reference incorporates said resolution, said Section 1210 and said ordinance, and by acceptance hereof the holder of this bond and the coupons hereto attached assents to said terms and conditions. Said resolution is adopted under, and this bond and the interest coupons hereto attached are issued under and are to be construed in accordance with said Charter, said ordinance and the laws of the State of California. 14 3/30 This bond and the interest hereon and any premium upon the redemption hereof are not a debt of the City of Anaheim, nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts, or revenues, except the gross revenues of the enterprise (as defined in said resolution) pledged to its payment, and the principal of and the interest on this bond and any premium upon the redemption hereof are payable solely from the gross revenues of the enterprise pledged to its payment and said City is not obligated to pay such principal, interest and premium except from said gross revenues. The Electric Revenue Fund is established under and pursuant to said Section 1210 of the City Charter, said Ordinance No. 2980 and said resolution, and under the provisions of said resolution the gross revenues of the enterprise are required to be deposited to the credit of said Electric Revenue Fund and used only for the purposes authorized by said resolution, including the payment of principal and interest of the issue of bonds of which this is one. By the terms of said Section 1210 of the City Charter and said Ordinance No. 2980 and by covenant expressed in said resolution, the City is obligated to prescribe, revise and collect charges for the services and facilities of the electric system of the City such as to provide revenues sufficient to pay the interest on and principal of the bonds as they become due and payable in addition to all other payments required for compliance with said resolution and the necessary and reasonable maintenance and operation costs of the electric system, is prohibited from issuing bonds having any priority with respect to payment from the gross revenues of the enterprise, and is subject to conditions with respect to any sale of said electric system. In the manner provided in said resolution, any or all of the obligations referred to in this para- graph and certain other obligations mentioned in said resolution may be waived with the consent of the holders of 60% in aggregate principal amount of the outstanding bonds, exclusive of issuer -owned bonds. This bond is callable and redeemable prior to maturity in accordance with the provisions for redemption endorsed hereon. This bond and the coupons hereto attached are negotiable instruments and shall be negotiable by delivery. This bond may be registered either as to principal only or as to both principal and interest, in accordance with the provisions for registration endorsed hereon. It is hereby certified and recited that any and all acts, conditions and things required to exist, to happen and to be performed precedent to and in the incurring of the indebtedness evidenced by this bond and in issuance of this bond exist, have happened, and have been performed in due time, form and manner as required by the Constitution and laws of the State of California and the City Charter of the City of Anaheim and that this bond, together with all other indebtedness of the City pertaining to the aforesaid electric system, is within every debt and other limit prescribed by the Constitution and laws of the State of California and said Charter. IN WITNESS WHEREOF, said City of Anaheim has caused this bond to be signed by the Mayor and the City Treasurer of said City by their facsimile signatures, countersigned by the City Clerk of said City, and sealed with the corporate seal of said City, and the interest coupons hereto attached to be signed by the City Treasurer by his facsimile signature, and has caused this bond to be dated May 1, 1976. COUNTERSIGNED: City Clerk of the City of Anaheim, California (SEAL) Mayor of the City of Anaheim, California City Treasurer of the City of Anaheim, California 3/30 (COUPON FORM) On the first day of ------------- 19 ---- The CITY OF ANAHEIM, CALIFORNIA, will pay to the bearer, at the office of the Treasurer of the City of Anaheim in Anaheim, California, or, at the option Coupon No. of the holder, at any paying agent of the City in Los Angeles or San Francisco, ........................ California, Chicago, Illinois, or New York, New York, out of the Electric Revenue Fund of said City and not out of any other fund or moneys of the City, the sum of $---------------------------- in lawful money of the United States of America, being the interest then due on its ELECTRIC REVENUE BOND, ISSUE OF 1976 NO. dated May 1, 1976, subject to the provisions on the reverse hereof. City Treasurer of the City of Anaheim, California On the reverse side of the coupon there shall be printed substantially the following: (REVERSE OF COUPON) If the bond to which this coupon is attached is redeemable and is duly called for redemption on a date prior to the maturity date of this coupon, this coupon will be void. PROVISIONS FOR REDEMPTION Unless this bond matures on or prior to May 1, 1986, it is redeemable in the manner and subject to the terms and provisions, and with the effect, set forth in the resolution referred to on the face of this bond, at the option of the City, on May 1, 1984, or on any interest payment date thereafter prior to maturity, upon at least 30 days' prior notice published in a newspaper circulated in the County of Los Angeles, California, and in a financial newspaper or journal of national circulation published in the City of New York, New York, at a redemption price for each redeemable bond equal to 10dtfa % of the principal amount thereof plus 1/4 % of such principal amount for each whole twelve months' period and for any remaining fraction of a twelve months' period from the redemption date to the maturity date of such bond, but the redemption price, including premium payable at any time upon redemption, shall not exceed 104% of such principal amount. Said resolution also provides for the mailing of notice of redemption to the owners of bonds registered as to both principal and interest. PROVISIONS FOR REGISTRATION This bond may be registered in the name of any person as the registered owner hereof, either as to principal only or as to both principal and interest, and, if registered in either of said forms may be changed to registration in the other of said forms or discharged from registration. Each registration, transfer after registration, change of form of registration, or discharge from registration of this bond shall be entered by the Treasurer of the City in books kept by him for the purpose, and noted by him in the registration blank below. Registration as to principal only shall not affect the negotiability by delivery of the coupons pertaining hereto. Upon registration as to both principal and interest, all unmatured coupons pertaining hereto shall be surrendered to said officer and shall be preserved. 16 3/30 So long as this bond is registered, no transfer hereof shall be valid for any purpose unless made by the registered owner and entered and noted as herein provided, and the principal hereof and any redemption premium shall be payable only to the registered owner, or to his order. Interest on this bond, if registered as to both principal and interest, shall be payable to the person whose name appears upon the registry books as the registered owner hereof at the close of business on the tenth day preceding the interest payment date, or to his order. If this bond is registered as to both principal and interest and its registration is changed to registration as to principal only, or if it is discharged from registration, there shall be attached hereto coupons representing interest hereon to become due thereafter to the date of maturity hereof. In lieu thereof, and upon surrender and cancellation hereof, the Treasurer in his discretion may issue in exchange therefor a new bond, with such coupons attached, identical with this bond, except for the previous notations on the registration blank hereon, and except that the signatures on the new bond shall be those of the persons holding office at the time of affixing such signatures. The issuance of any such new bond, or new coupons, shall be at the expense of the registered owner. Each discharge hereof from registration shall be effected by an entry on the registry books, and a notation in the blank below, that this bond is payable to bearer, whereupon this bond shall become an unregistered bearer instrument, negotiable by delivery as if it had never been registered. Each request for registration, transfer, change or discharge must be in form satisfactory to the Treasurer and must be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the bearer, as the case may be. Date of Registration In Whose Name Registered Manner of Registration Signature of Treasurer Section 25. Proceedings Constitute Contract. The provisions of this Resolution and of any resolu- tion or order providing for the sale of the Bonds and awarding the Bonds and fixing the interest rate or rates thereon shall constitute a contract between the City and the bondholders and the provisions thereof shall be enforceable by any bondholder for the equal benefit and protection of all bondholders similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the State of California. No remedy conferred hereby upon any bondholder is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by the Charter, Ordinance No. 2980 or any law of the State of California. No waiver of any default or breach of duty or contract by any bondholder shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies on said subsequent default or breach. No delay or omission of any bondholder to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any such default or acquiescence therein. Every substantive right and every remedy conferred upon the bondholders may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and the bondholder shall prevail, said bondholder shall be entitled to receive from the Electric Revenue Fund reimbursement for reasonable costs, expenses, outlays and attorney's fees and should said suit, action or proceeding be abandoned, or be determined adversely to the bondholders then, and in every such case, the City and the bondholders shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. 17 3/30 After the issuance and delivery of the Bonds this resolution shall be irrepealable, but shall be subject to modification to the extent and in the manner provided in this Resolution, but to no greater extent and in no other manner. Section 26. Defeasance. Bonds shall no longer be deemed to be outstanding and unpaid if the City shall have made adequate provision for the payment, in accordance with the Bonds and this Resolution, of the principal, interest and premiums, if any, to become due thereon at maturity or upon call and redemption prior to maturity. Such provision shall be deemed to be adequate if the City shall have irrevocably set aside, in a special trust fund or account, moneys which when added to the interest earned or to be earned from the investment or deposit thereof shall be sufficient to make said payments as they become due. Moneys so set aside may be invested in any direct obligations of, or obligations guaranteed by, the United States of America, or in obligations of any agency thereof, in which the City may lawfully invest its money and, to the extent not so invested, may be placed with banks as inactive deposits in the manner provided by law. Section 27. Future Contracts. Nothing herein contained shall be. deemed to restrict or prohibit the City from making contracts or creating bonded or other indebtedness payable from the general fund of the City or from taxes or any source other than the revenues of the enterprise as defined herein, and from and after the sale of the Bonds the general fund of the City shall not include the revenues of the enterprise and no contract or other obligation payable from. the general fund of the City shall be payable from the revenues of the enterprise, except as provided herein. Section 28. Severahility. If any provision, or any portion thereof, contained in this Resolution, or the application thereof to any person or circumstance is being held to be unconstitutional, invalid or unenforceable, the remainder of this Resolution and the application of any such provision, or portion thereof, to other persons or circumstances shall be deemed severable and shall -not be affected thereby, and this Resolution and the Bonds shall remain valid and the bondholders shall retain all valid rights and benefits accorded to them under this Resolution, the City Charter, and the Constitution and laws of the State of California. Section 29. Effective Date. This Resolution shall take effect upon :adoption. ADOPTED,. SIGNED AND APPROVED this Attest: City Cler STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF ANAHEIM ) I, ALONA M. HOUGARD, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 76R-149 was intro- duced and adopted at a regular meeting provided by law, of the:City Council of the City of Anaheim held on the 30th day of March, 1976, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Ka.ywood, Seymour, Pebley, Sneegas NOES: COUNCIL MEMBERS Thom ABSENT: COUNCIL MEMBERS: None AND I FURTHER CERTIFY that the Mayor of the City of Anaheim approved and signed said. Resolution No. 76R-149 on the 30th day of March, 1976. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim this 30th day of March, 1976. CITY CLERK OF THE CIT ,OF ANAHEIM I, ALOHA M. HOUGARD, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 76R-149 duly passed and adopted by the Anaheim City Council on- March nMarch 30, 1976. City Clerk